The Political and Economic Mystiques of State Power

One of the great political mysteries has been the success of governments in ruling over societies with little opposition and resistance from the vast majority of the population, even when those governments have been brutal tyrannies and openly dictatorial in their control.

This has been true, no less, under democratic regimes, as well, under which levels of taxation have been far higher and the degrees of regulation over personal, social and economic activities often much more intrusive than under tyrants of bygone ages. This has been in spite of the fact that those governments are formally “answerable to the people” through regular elections determining who holds high political office with legitimized power over the electorate’s lives.

Conquest and Plunder as the Origin of the State

It has long been understood by historians that most modern States, such as in Europe, have their origins in conquest and plunder. Invading tribes and bands would vanquish existing rulers and their peoples, and settle down to permanently live off those whom they had not killed during the conquest.

The German sociologist, Franz Oppenheimer (1864–1943), especially emphasized this in his classic work on the origin of political power and authority, The State (1914). He argued that there are fundamentally two ways by which individuals may obtain the material means that they wish to have to maintain and improve their lives: the economic means and the political means: Said Oppenheimer:

There are two fundamentally opposed means whereby man, requiring sustenance, is impelled to obtain the necessary means for satisfying his desires. There are work or robbery, one’s own labor and the forcible appropriation of the labor of others.

I propose in the following discussion to call one’s own labor and the equivalent exchange of one’s own labor for the labor of others, the “economic means’ for the satisfaction of needs, while the unrequited appropriation of the labor of others will be called the ‘political means” ...

Oppenheimer warned that when individuals have the choice between these two methods for acquiring what they desire, people were too often tempted to use coercion rather than avenues of peaceful production and trade. He said: “Wherever opportunity offers, and man possesses the power, he prefers political to economic means for the preservation of his life.”

Oppenheimer then asked:

What, then, is the State as a sociological concept? The State ... is a social institution, forced by a victorious group of men on a defeated group, with the sole purpose of regulating the dominion of the victorious group over the vanquished, and securing itself against revolt from within and attacks from aboard. ... This dominion had no other purpose than the economic exploitation of the vanquished by the victors. No primitive state known in history originated in any other way.

From Roving Bandits to Permanent Power

Oppenheimer’s view was restated in more recent times by the Public Choice theorist, Mancur Olson (1932–1998), in his posthumous work, Power and Prosperity (2000), in terms of the economic motives and actions of the conqueror. Olson argued that the origin of the state could be seen in the replacement of roving bands of plundering thieves by stationary bandits who settle down to rule over a territory over a prolonged period.

The roving band cares nothing for what happens in the area it has looted and then leaves behind. But the stationary bandit who wants to permanently live off the conquered area has to take into consideration the conditions and the incentives of his subjects if they are to keep producing and therefore creating something for him to plunder through taxation year-after-year.

Thus, out of the taxes he imposes, the stationary bandit must also, in his own self-interest, to some extent secure his subject’s property rights, enforce contracts, establish a judicial system to adjudicate their disputes, and even supply some “public goods,” such as roads and harbors to facilitate commerce.

But the resident conqueror’s motive in providing any such protections and enforcements for those over whom he rules is to extract the greatest amount of tax revenue for himself at the least cost of respecting and enforcing the property rights of his subjects, but to whom he must offer some minimal degree of such security. Otherwise, their incentive to produce the wealth out of which his tax revenues come might be far less. Said Mancur Olson:

The bandit leader, if he is strong enough to hold a territory securely and monopolize theft there, has an encompassing interest in his domain. This encompassing interest leads him to limit and regularize the rate of theft and to spend some of the resources he controls on public goods that benefit his victims no less than himself.

Since the settled bandit’s victims are for him a source of tax payments, he prohibits the murder and maiming of his subjects. Because stealing by his subjects, and the theft-averting behavior that it generates, reduces total income, the bandit does not allow theft by anyone but himself.

He serves his interests by spending some of the resources he controls to deter crime among his subjects and to provide other public goods. A bandit leader with sufficient strength to control and hold a territory has an incentive to settle down, to wear a crown, and to become a public goods-providing autocrat.

But brute force and fear is, in the long run, not a sustainable basis for permanent plunder and privilege by a conquering few over the conquered many. It is far better if those over whom the ruler rules not only acquiesce in his control and commands out of fear, but also do so willingly through belief in the rightness and justness of his political authority over them.

How, then, do political rulers inculcate this belief in their right to rule and with it an obedient allegiance and loyalty by the subjects and citizens to the governments they command?

Louis Rougier and Political and Economic Mystiques

This was a theme taken up by the French philosopher and classical liberal economist, Louis Rougier (1889–1982). Especially in the two decades of the 1920s and 1930s, between the two World Wars, Rougier was one of the leading European defenders of limited government and free market, competitive capitalism, and a critic of the totalitarian collectivisms of that time that seemed to be threatening to dominate much of the world.

He discussed this question in two works, Modern Political Mystiques and Their International Impact (1935) and Modern Economic Mystiques and Their International Impact (1938), both originally delivered as series of lectures at the Graduate Institute of International Studies in Geneva, Switzerland. The Graduate Institute was a classical liberal-oriented seat of higher learning that with the rise of Italian fascism and German Nazism served as a refuge for a number of prominent scholars searching for an intellectual home away from their, now, totalitarian homelands (including the Austrian economist, Ludwig von Mises, German economist, Wilhelm Röpke, and Italian historian, Guglielmo Ferrero, among others).

Governments and ideological movements, Rougier explained, wrap themselves in “mystiques” that serve as the rationales for claims to an ethical and legal right to rule. What is a “mystique”? Said Rougier:

The term refers then to a combination of beliefs which could not be demonstrated by reason or based on experience but which are accepted blindly for irrational reasons: by the effect of custom of which Pascal speaks, of education, of authority, of example, of preconceptions alleged to be inevitable, in short by the effect of all the pressures of social conformism.

These beliefs may be moral, esthetic, scientific, social, or political. Every doctrine that one no longer feels the curiosity or the need to call into question, whether it is because one accepts it as a dogma so evident that any inquiry about its solidity is superfluous, or because one adheres to it by an act of faith considered so necessary as a consequence of its sacrosanct beneficence that to abandon it would be outrageous, is a mystique and is accepted as such.

The Economic Mystique versus Laws of the Marketplace

An “economic mystique,” Rougier said, is one that allows a person to believe in the power of government to do anything it wants, say, in the form of various types of government intervention affecting wages, prices or production with the unquestioning presumption that what the government declares as the intervention’s purpose will fully materialize with no negative or unintended consequences.

The notion that there are economic “laws” of supply and demand, or cost and price relationships effecting profitability or employability, are either unknown or ignored or rejected by a seemingly unreasoned belief that because the stated goal of the intervention is “good,” then it is only necessary for government to implement the interventionist policy to make it so. The same applies, Rougier, said, in the case of the proponents of socialist central planning.

If something hinders or prevents the achievement of the intervention’s goal, then it must be due to either not enough “force” being applied or not enough money spent to make it so; or some nefarious, socially evil individuals or groups acting to thwart it. The same applies, Rougier argued, in the case of the proponents of socialist central planning. The failure to successfully meet the government’s planning targets can only be due to intriguing “enemies of the people,” or traitorous “wreckers” in the service of foreign powers trying undermine the triumph of the collectivist utopia, or a negligent lack of sufficient enthusiasm and disciplined dedication among some of the workers and managers.

The classical liberal-oriented economist has reason on his side relative to the believer in such economic mystiques because, Rougier insisted, not every value-judgment is merely a matter of “subjective” or personal, desire or belief, not open to objective investigation or evaluation. If a person says that he prefers wearing red ties to blue ones, or enjoys driving one type of car versus another, there may be little to dispute or challenge by someone else about that stated preference.

But if someone says, for instance, that they support a government imposed minimum wage or a trade barrier because he believes that such a policies will, respectively, improve the living condition of the unskilled with no affect on the amount of employment for such workers, or will increase the overall level of production and employment in the economy with no adverse effects, the economist has a logical and experiential benchmark on the basis of which to evaluate them. That benchmark is: will the interventionist means chosen, in fact, achieve the goals, purposes and ends in mind? Or as Rougier expressed it:

If afflicted with an inferiority complex, you prefer authoritarian regimes [because it “subjectively” enhances your sense of self-esteem], nobody will deny that your choice answers a real need in your character, and there is nothing to argue about. But if you state, ‘I prefer authoritarian and totalitarian governments to liberal government because they are better suited to assure the well-being of individuals and the peace of nations,’ you offer a judgment that one can submit to the verification of experience, to the facts and of history.

And the lessons of economic history and economic theory show beyond much of a reasonable doubt, said Rougier, that the means chosen in these cases — minimum wage laws, protectionist trade barriers, authoritarian regimes — will not bring about the desired ends of higher incomes, improved living standards, and international peace and harmony.

Attempts to reason with the holders of such economic mystiques are often brushed aside by their believers. The reasoned argumentation, presentation and discussion of historical or contemporary facts and evidence or logical argument are often emotionally rejected as a proof that the critic of the economic mystique has no compassion or a sense of caring for those to be helped by the intervention or the government planning.

Political Mystiques as Rationalizations of Power and Plunder

Part of the reason for this, Rougier suggests, is the wider and deeper problem of “political mystiques” that serve as the bases to justify and legitimize the right of some to rule over others, and the accompanying belief in their power to do “good” if only given enough power.

From the time of antiquity, Rougier explains, the conquerors and rulers have searched for that legitimizing justification for their control and command over others in society. The “monarchical mystique” did so, and for thousands of years, by successfully rationalizing political power through the claim and the indoctrination of a divine right to rule. The king held his absolute and unquestionable authority because he was a “god” himself, or had had this status bestowed on him by “the gods” or God.

From the time of the ancient Hebrews the anointing of the ruler by a high priest by poring “holy oil” upon his head, or being handed the sacred sceptered, or by having placing a crown upon the royal head, all symbolized that a “higher power” than any mortal man had selected this person and his heirs to command all others in his domains with loyalty and obedience by all those below him.

In Europe a long train of events over several hundreds of years challenged and weakened the absolutist claims of the king or emperor; this was partly done by the Catholic Church attempting to maintain or extend its own autonomy and authority, and partly by noblemen and then commoners who chafed under and resented and resisted the arbitrary decisions and demands of the monarchs under which they lived. By the time of the Enlightenment in the 1700s, secular skepticism and political dissent weakened and finally undermined the “superstition” of the “divine” authority and legitimacy of kings. While it linger on into the 1800s, the right of kings to rule over and command others was symbolically beheaded along with the actual decapitation of the king of France, Louis XVI, in Paris in 1793.

The Democratic Mystique of “the People’s” Self-Rule

But a new mystique arose rapidly in its place in the late eighteenth and early nineteenth centuries, the “democratic mystique.” From the rule of “the one” there emerged the idea and ideal of the “rule of the many.” Rougier explained:

By a daring transposition sovereignty was transferred from the monarch to the people themselves. It appeared that as soon as power was exercised by those who bore its burden, it would be exercised with the minimum of despotism ...

Since all the citizens are considered by their representatives to participate in the establishment of the law, the law seems to be the expression of the general will. Everyone submits to it willingly because everyone has the illusion that he has participated in its formation and that, obeying everybody, he obeys himself. The fundamental political problem, that of freely granted obedience, is, in a way, solved by definition. This is where the great strength of democracies comes from. Never has any form of government exercised such extensive discretionary power over the governed without the apparatus of coercion.

Let us compare the ease with which the democracies have established general [military] conscription or have taken away up to 80 percent of the wealth of their citizens without provoking a revolt with the difficulty the monarchies under the old regime had in raising soldiers and taxes. By making the sovereign and the subject one, the democratic mystique has brought about the maximum of authority with the minimum of constraint.

But democracy “works,” argued Rougier, only for as long as the reach and responsibility of a government extends, in general, no further than primarily securing, protecting and respecting the rights of the individual members of society to their lives, liberty and property. The freedom of the individual is only assured for as long as the government does not intrude into the marketplace with interventions, regulations, controls and central planning.

That is, democracy served as a peaceful way of appointing those holding political office and securing people’s liberty rather than violating it only for as long as it functioned in a cultural and social setting based on the ideas and ideals of political and economic classical liberalism. In Rougier’s words:

As soon as the state adds economic power to its political power, whether it holds all the means of production or simply claims to regulate production according to a preconceived plan, it turns out to have all powers and to grant some of them only arbitrarily to individuals.

In reality, for an individual to be free vis-à-vis the state he must be able to do without the state’s services, he must be able, if need be, to resign from a public function, if he is forced to act against his conscience, without running the risk of not finding other employment. Now this in inconceivable in a statist or collectivist regime, where the individual has no other alternative than to be a functionary, a client of the state, or die of hunger.

Buried in the democratic mystique, Rougier explains, in the fallacy of “the people” ruling themselves. Once delegation of authority is transferred from the citizens themselves to representatives in the government who pass, administer, and enforce legislation and the law, two things have historically come into play. First, the elected representatives are discovered to have their own purposes and interests that may have little or nothing to do with that of the constituents as a whole who have put them in political office.

And, second, election and reelection may be more easily assured and maintained by serving coalitions of special interest groups who see ways of using the State for their own ends outside of the free and voluntary competition of market exchange. The political system of politicians and special interests “buries economic liberalism by using state intervention for its own benefit to maintain the positions it has acquired,” lamented Rougier.

Writing in the 1930s, Louis Rougier’s concern and fear was that the corrupted and corrupting “democratic mystique” was being superseded by the “totalitarian mystiques” of communism, fascism and Nazism – mystiques surrounding alternative collectivisms in the forms of Marxian class conflict, fascist aggressive nationalism, and Nazi “race warfare.” Here were other conceptions of the collective mystique of “the will of the people” far more brutal and tyrannical than anything seen in modern history.

The Tyranny of Modern Tribal Identity Mystiques

Today, there are other “political mystiques” that are advancing over the landscape of society. These are the “gender mystique,” the new multicultural “race mystique,” and the new anti-income inequality “social class conflict mystique.” They are all versions and forms of cultural and economic collectivism joined with demagogic intolerance of speech, thought and peaceful action, based on new tribal mystiques of group identity within which the individual is confined and from which there is no escape as an thinking and choosing individual.

And here, once again, what makes them “mystiques” as Rougier defined them, are unreflective and unchallengeable beliefs not open to reasoned discourse and debate. Any questioning and criticism of them is met with hysteria, emotional condemnation, and insistence that the opponent of the new tribal-group identity mystique be forcibly silenced and banished. Even, as some dare to say, to be put to death as an enemy of the gender, racial or ethnic collectives declared to be the irreducible social entities within which the individual is to be culturally and politically imprisoned.

In the 1930s, Louis Rougier insisted that if both the democratic mystique and the totalitarian mystiques were to be stopped and reversed, there was only one lasting avenue: “to return to the practices of political, economic, and cultural [classical] liberalism.” That message is no less true and relevant today in the face of the emerging totalitarianism of the new gender, racial and ethnic “identity politics” mystiques.